Posts Tagged ‘tax consultations’

h1

State of play

September 16, 2015

So there are fourteen open consultations listed as relating to HMRC on the gov.uk website today.  If you filter instead for the “tax and revenue” policy area (all departments) the total comes up as 18 – four from the Treasury.  Query: why are some tax consultations badged from the Treasury and some from HMRC?  Answers on a postcard…

The first is a review of travel and subsistence rules.  It was published under the coalition government, in July 2014, but says that it closes at quarter to midnight on 1st May 2016.  I find this rather improbable, and I wish gov.uk would have a look at it.

You have until 30th September to respond on the taxation of performance linked rewards paid to asset managers, employment intermediaries and tax relief for travel and subsistence, ISA qualifying investments and crowd funding, and the IR35 discussion document

You need to get motoring to respond to the implementation of the Personal Savings Allowance and the deduction of income tax from interest in peer to peer lending which both close on 18th September.  The other handful all have closing dates in October.

But I could have read and perhaps responded to one of them in the time I’ve taken today trying to identify which one to prioritise.  Because apparently listing consultations with a visible closure date and/or in the order in which they close remains beyond the wit of a twenty first century government.  Or, as I said on Facebook yesterday, you’d almost imagine they didn’t want responses from Jo Public.

 

h1

Small firms impact: not waving but drowning [Part 2 of 4]

February 5, 2015

A TIIN is supposed to answer seven questions.  (They are here in the TIIN instructions – the TIIN instructions still aren’t published by HMRC – and why not??? – but let’s assume the basic principle is still the same as “in my day”.)

The questions are:

What are you doing?

Why are you doing it?

Why are you doing it this way?

What will it cost/raise?

What will it cost the customer?

What will it cost the department?

Are there any other impacts?

“Why are you doing it” is a powerful question in the “better regulation” mindset, which basically reflects a worldview in which regulation is a Bad Thing in and of itself.  The idea is that regulation is nothing more than Red Tape, which would be Strangling Business unless it was itself regulated.  “Why are you doing it (at all)” is really the question, if you think that having no regulation at all is the ideal.

So why is the government doing MOSS at all?  Well let’s see.  The policy objective field of the TIIN (still on page A111) is where the answer ought to be, and it says:

Policy objective The measure will make business to consumer (B2C) supplies of BTE services taxable where they are consumed, thereby removing an incentive for businesses to locate offshore. This will level the playing field for UK BTE suppliers and is consistent with the Government’s aim of fairness in the tax system. The MOSS business simplification scheme is intended to reduce the administrative burdens and costs associated with this rule change and multiple VAT registrations for BTE suppliers, particularly for small and medium enterprises (SMEs).

Translated into English, I think this means there are two objectives:

  1. The main objective is to stop big companies from gaming the system by setting up shop somewhere with a low VAT rate.  Instead of VAT being charged where the supplier is located, from January 2015 it is charged (for electronic services like e-books) where the customer is located.  So small companies should have a more “level… playing field… consistent with the Government’s aim of fairness…”
  2. Because this change comes with associated costs for small companies, there will also be the “mini one stop shop”, the MOSS, which stops you having to register for VAT separately in each member state and instead handles it all in once place, the place the seller is located.

Now, I think the objectives are good ones in themselves.  Let’s make it easier for authors to sell their own works, for craftswomen to sell their own knitting patterns, for musicians to sell their own tunes, directly to the customer without having to lose a slice of their profits to a multinational selling for them.  And, yes, let’s keep the administration as simple as possible.

So what went wrong?

Let’s go back to the TIIN, to the summary of impacts that starts at the bottom of page A112.

Screenshot 2015-02-05 14.14.50

The first line shows you how much money the government expects to get as a result of this change.  The numbers are in millions of pounds, and the plus sign means the government expects to get this much tax in from the change.

The first few months of 2015 are still in the 2014-15 tax year (the tax year runs from 6th April one year to 5th April the next year).  So between January 1st and April 5th 2015 the UK government estimates it will make £70 million in VAT from the changes.  In a full year, it thinks it will make an extra £300 million plus, with the numbers rising over time.

I think we can all agree three hundred million is a sum worth having.  For the government, it’s the cost of, say, the entire NHS radiotherapy service (table 9 page 28, 2011-12 figures).  But look at this: “The MOSS element of the measure is expected to have a negligible impact on the Exchequer.”

Now, I understand “negligible” in an impact assessment to mean “less than £100,000 across the entire affected population”, which is what it used to mean in 2012 when I was last working for the government.  But have a think about that.  The entire farrago of MOSS is expected to bring in less than a hundred grand?  Seriously?

Because one of the seven questions written into the tax original impact assessment proposals, and which was still there when I obtained the TIIN instructions and published them on my blog, is

why are you doing it this way???

Why the hell are you imposing this business-busting system on people from whom you expect to raise peanuts, when you’re still going to get the moolah you want from the big businesses it’s really aimed at?  Is this really the only way?

Option appraisal is one of the key elements of impact assessment methodology: generating and assessing all the possible ways of solving a possible policy issue and then choosing the best one, even if it’s the option to “do nothing” – that’s how governments tell themselves they solve problems.

So where is the options appraisal in this TIIN?

Don’t bother to look.  It isn’t there.

Look instead at the assessment of the economic impact.

This measure should have positive economic impacts by minimising distortions to the location of the economic activity and increasing competition between large and smaller suppliers within the sectors affected.

Well perhaps it “should”.  In an ideal world it would.  But in this imperfect world, HMRC completely overlooked the one-woman kitchen-table microbusiness and introduced a system which, far from “minimising distortions” and “increasing competition” will in fact wipe out the micro businesses or else drive them into the arms of the very businesses whose behaviour caused the policy problem in the first place.

A proper options appraisal might have included:

  • excluding micro businesses from the regulation altogether
  • allowing a longer lead in time before the regulation affected small and micro businesses
  • unilaterally setting a threshold below which the regulations do not apply
  • making payment processors legally responsible for operating the regulation
  • devising a MOSS which itself operated as a payment processor for micro businesses (instead of a paypal or worldpay etc button you could have a MOSS button – your money would come to you VIA the government, but come to you guaranteed VAT-compliant)

There might have been good reasons for and against any or all of these.  But if you don’t ask the right questions of the right people, well, you’ll never know, will you?

 

h1

Midnight at 100PS

September 8, 2014

Imagine the scene: it’s eleven thirty pm and the clock is ticking down towards midnight at 100 Parliament Street.  A crack team of HMRC and HMT civil servants are clustered around a single computer terminal, the sickly light the only source of illumination in the vast emptiness of their cavernous shared workspace (where, in daylight, a hundred drones compete for every 65 chairs).  Someone seated at the terminal constantly hits the “refresh” button, while another holds a stopwatch, and their colleagues’ gazes flick nervously between the two.  At 11.42 they start to make eye contact with each other, the light of hope dawning in their eyes.  At 11.43 there are some fingers crossed.  At 11.44 someone begins a lugubrious countdown and gradually the rest of them join in: ten… nine… eight… seven… six… Five!  Four!   THREE!   TWO!!  ONE!!!  11.45 pm everyone!  The Consultation into the New Employee shareholding vehicle is now CLOSED!

Champagne is opened.  Someone hits refresh for one last time and the whole crowd erupts: LOOK AT THAT! THIS LOSER SENT IN HIS RESPONSE AT 11.47 BWA HA HA HA HA…

Well of course it’s nonsense!  What happens in real life is you set the date for your consultation to close, you hear nothing much till the actual day, and then they all tumble in at once, some before midnight, some after, and you pick them up when you come in the next morning.  And, yes, including the ones sent hopefully at 4.30am and, if you’re feeling generous, the ones that came in half an hour after you did but before you’d finished reading the rest of them.

Nothing hangs on a consultation deadline, not to the degree of precision that requires a countdown anyway.  You need the responses to be sent so that you have time to read them and consider what’s said before you have to commit to any further action.  You might have Parliamentary and other deadlines to meet, but you know your consultation guidelines and you allow as much time as you can to give the participants giving you valuable feedback some reasonable chance of considering your proposals at leisure.  What you don’t – ever, in my experience – do, is to cut off people whose response is signed off five minutes late.

So why the devil has gov.uk started giving deadlines with actual time limits – 5pm, 11.45 pm, 12.00am – on the open consultations?  What will actually happen if I send in my response to the consultation into legislating ESC D33 at 3.31pm rather than at 3.29?  As our younger netizens say, WTF, gov.uk?

Here’s the list:

9 September 2014 5.00pm VAT: Prompt Payment Discounts

9 September 2014 11.45pm Employee benefits and expenses: exemption for paid or reimbursed expenses

9 September 2014 11.45pm Employee benefits and expenses: abolition of the £8,500 threshold for lower paid employment and form P9D

9 September 2014 11.45pm Employee benefits and expenses: real time collection of tax on benefits in kind and expenses through voluntary payrolling

9 September 2014 11.45pm Employee benefits and expenses: trivial benefits exemption

12 September 2014 11.45pm Stamp Duty Land Tax rules for property investment funds

15 September 2014 3.30pm Legislating Extra Statutory Concession D33

16 September 2014 5.00pm Annual Tax on Enveloped Dwellings: reducing the administrative burden for business

19 September 2014 5.00pm Landfill tax – liability of waste ‘fines’

19 September 2014 5.00pm VAT relief on substantially and permanently adapted motor vehicles for disabled wheelchair users

19 September 2014 5.00pm Sharing and publishing export data for public benefit

22 September 2014 5.00pm Improving the operation of the Construction Industry Scheme (CIS)

10 October 2014 5.00pm Office of Tax Simplification review of unapproved share schemes: marketable security

10 October 2014 11.45pm New Employee shareholding vehicle

15 October 2014 12.00am Inheritance Tax: exemption for emergency service personnel

16 October 2014 5.00pm Internationally mobile employees and earnings related securities

22 October 2014 9.30am implementing agreements under the global standard on automatic exchange of information

23 October 9.30am Strengthening the Tax Avoidance Disclosure Regimes

31 October 2014 5pm Tackling offshore tax evasion: Strengthening civil deterrents

31 October 2014 5pm Tackling offshore tax evasion: A new criminal offence

Hmmm… looks like a busy day tomorrow.

 

[Note: edited 9th September to reflect the fact there are four consultations closing at 11.45pm tonight and not 3: I had misread the Trivial Benefits closure date as 19th and not 9th.  Sorry!]

h1

New Year, same problem

January 7, 2014

“But look, you found the notice didn’t you?”

“Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard’.”

Hitchhikers Guide to the Galaxy

As you will know by now, I can bore for England on the subject of tax consultations and, in particular, on the interesting way that they’re brought to our attention on the Gov.uk site.

Let’s have a first look of the new year at what tax consultations are out there, I thought.  So I went to gov.uk and hit the link that says “get involved”, which helpfully takes you straight to the consultations page.  Today, it proudly informs us that there are 93 open consultations and 578 closed ones.  So I clicked on “open consultations”… which was a link to the page with the filter options, but which told me it had 148 open consultations from which to choose.  Hmmm…  So filtering by open consultations in the “tax and revenue” subject area?  Brings up 6 consultations – all closed!  Open consultations in any subject from HMRC?  Four – all closed.  From HMT?  Another four (not the same ones), also all closed.

In other words…

Well, frankly, I don’t know.  At this point in the policy cycle I’d imagine there won’t be much around on which the government is asking our opinions.  Although strictly speaking I’d have thought the legislation for the 2014 Finance Bill ought to be out for consultation – not on the policy itself, but on whether the wording works.  Or have I missed that?  I don’t know.

I don’t know, and at this point, using the publicly available resources the government have put into the citizen’s hands, I can’t seem to find out.  Which is a bit poor, actually.  I may write to the House of Lords Secondary Legislation Scrutiny Committee again, as they seem to be the only people interested in the mechanism of legislation.  But then, they reported in November that the government “are prioritising administrative convenience over effective consultation“.  And if they can’t get anyone to listen to them, well, what hope do the rest of us have?

h1

Not waving…

October 18, 2013

Yes, I’m still alive.  No, I haven’t posted for over a month.  Long story short: had a ridiculously bad cold at the same time as a short term contract to deliver some training at the same time as the new  university term started.  Blogging, I’m afraid, fell towards the bottom of the “to do” list and, as I never got much beyond “Work.  Eat.  Take medication.  Sleep.” I’m afraid I’ve been out of the tax consultation loop for a bit.

So where are we now?

I started off with a quick gallop through the gov.uk consultations page to see what was open and if anything was coming to a close soon…

…which gave me some odd results.  The page tells me that government has 144 open consultations today, which is a substantial number, and that ten of them are HMRC’s.  But as I glanced down the list of ten I started thinking, hang on, this is odd – haven’t I already answered this one?

So I filtered again, by “all departments” and subject is “tax and revenue”, and got a list of nine tax consultations.

Eight of which are already closed.

Um… hello, gov.uk?  I left feedback on both pages, but I think your search engine is…. (looks for polite alternative to the word that immediately springs to mind.  Settles for:) in need of some remedial attention.

All right then, let’s go back to my own laboriously constructed spreadsheet from July 22, which shows no tax consultations with a closing date after October 14th.  And then let’s go back to gov.uk and search for “all consultations” published by HMRC after 22/7/13.

This brings up a list of 16 results: seven consultation outcomes, four closed consultations and five “open consultations”.  Good: now we’re getting somewhere.

They are:

  • Tax-Free Childcare – closed
  • Alcohol fraud: next steps – closes 28th October
  • Reform of an anti-avoidance provision: Transfer of Assets Abroad – closed
  • Residence of Offshore Funds – extending the scope of Section 363A Taxation Act 2010 – closed
  • Investment Management Exemption and Collective Investment Schemes: expanding the “white list”- closed

So, sorry gov.uk, but something is going wrong with your classification system.  And now I’ve run out of time to blog for today, too, and all I’ve achieved is to identify there seems to be only one open tax consultation.

Which is, I suppose, at least something.  Sigh.

h1

Open tax consultations

May 29, 2013

Here are the four from HMRC:

Title Link Date of closure
Changes to VAT zero-rating of exports from the UK Link here 5 July 2013
National insurance and self-employed entertainers Link here 6 August 2013
A review of two aspects of the tax rules on Partnerships Link here 9 August 2013
Office of Tax Simplification: review of unapproved share schemes Link here 16 August 2013

(One day I’ll work out how to do pretty tables in WordPress, sorry!)

There are a couple of interesting things about this list, over and above my general gripes about the problems of finding them in the first place.

Note the closing dates?  The earliest one is 37 days away, and the others are 69, 72 and 79 days respectively.  The days of a three month (90 day) consultation are over, and the concern about consultations over holiday periods haven’t quite sunk in  yet.

Also… where are the rest?  Look at table 2.1 (starting on page 64 here) of Budget Policy Decisions.  Ignore the measures already announced and skip down to the heading “Growth and enterprise” and look from there to the end of the table.  I make it 29 measures from there on down which are categorised as “tax” (as opposed to spending) changes.  Then look at OOTLAR (Overview of Tax Legislation and Rates) published at the same time and go to chapter two, Future Tax Changes (start on page 18) where you will find 47 announcements, some of which will and some of which won’t lead to consultations.

Oh, and look at this, published in the same chapter, back in March:

2.1 This chapter summarises new tax changes announced in Budget 2013, where the change is to be made in Finance Bill 2014, other future finance bills, programme bills or secondary legislation. In line with the Government’s new approach to tax policy making, the vast majority of these measures will be subject to consultation. To assist those who wish to take part in tax consultations, a “tracker” will be published on the HM Treasury and HMRC websites setting out the planned dates of future consultations.

Well where’s my bloody tracker then????

h1

Gov.uk

May 28, 2013

What do we think about the new! improved! all-singing, all-dancing! government website, gov.uk?

I only ask because, of course, all the government’s tax consultations have been moved onto the new site, and because of the suggestion – which also became a recommendation by the House of Lords Secondary Legislation Scrutiny Committee – that there should be a single government website listing ALL consultations in the order of the date of closure.

Because – as I have previously mentioned – if you go here, to the consultation page, you have to filter first to get “consultations” from the welter of other “publications”, and then you have to filter again by department (not subject) to get HMRC and HMT consultations, and even then there’s no way of filtering out tax consultations from other Treasury consultations.

However this gives you a list of (today, at least) 19 HMRC consultations and 89 HMT consultations – but of the HMRC 19 there are only four open consultations, as against 10 “closed consultations” and four “consultation outcomes”, and HMT has 5 open consultations, 45 “consultation outcomes” and 39 “closed consultations”.  Wouldn’t it be great if you could just filter by “open consultations” and THEN by Department and get to the nine you were actually interested in?

I had assumed the functionality wasn’t there on the website and that, in response to the House of Lords Committee’s recommendations, they’d be working on it when and if resources allowed.

And then I came across this page, on Getting Involved, where there is a running tally of open consultations telling me there are, currently, 55 open consultations across the government, or at least across government departments and agencies that have moved their web presence over to the Gov.uk site.

So the functionality to identify open consultations IS there somewhere, but isn’t being used in a way that would actually be useful to the users of the site?  You’d almost think it was deliberate…